On paper, the music industry has been booming, with both streaming services and record labels being more successful than ever. Yet why am I skeptical about the future of both? NFTs.
Spottie Wifi (aka Mig Mora) made headlines back in September by revitalizing his career through becoming the first “Cryptopunk Rapper.” He released a limited EP with just 2000 copies, and each purchase came with an NFT which granted rights to the master recordings and a vinyl. He made almost $200,000 in a minute. Mig Mora would have never made this much money on a normal release. Most artists will never make this much on any release in their career. However, there is a difference to be made between Spottie Wifi and celebrities such as John Cena and A$AP Rocky.
There has been an exponential rise in NFT popularity across the board, especially in the music world among very famous musicians. Artists like The Weeknd and Grimes have been dipping their toes in making NFTS, selling over $8 million worth of NFT collections.
When major celebrities or musicians create NFTs, it is often just a money grab for them. It builds massive hype around NFTs, which translates into further NFT purchases. However, these NFTs lose value very quickly as seen in this article by Bloomberg. This is creating a poor environment for the consumer while promoting a poor environment for our globe.
However, when executed better, the carbon footprint can be offset, right? Well, not quite. The price is hefty – you can now actually calculate the exact price through Aerial – and the actual act of doing so isn’t as beneficial as one may think as highlighted by this Gizmodo article. How many trees can the world possibly plant? Not nearly enough if “The Weeknd’s drop, according to Aerial, likely emitted 86,000 kilograms of carbon, roughly the equivalent of 86 flights from New York to London” (Fast Company). There are a limited number of ways to offset your carbon emissions, a number which is sure to shrink as the world’s answer to climate change is offsetting carbon emissions. However, it is much easier and frankly more cost efficient to not put out the carbon emissions in the first place by not making NFTs.
But society is society. People don’t care about the planet’s future, they care about how much money they can make in the short term. Why else would Shawn Mendes need to be putting out an NFT collection? He has a net worth of $40 million. So, as long as the NFT business is thriving and damaging our planet, smaller artists can take advantage of this and make money in ways unimaginable before. If any group of people were to make money off of NFTs, it should be the artists that make $0.004 per stream and are stuck in shitty record deals that limit their creative ability (shoutout Frank Ocean) and let rich white men reap the rewards of everyone's work.
So how will this affect the music industry? We have long since understood the negatives of the industry and the need to change to a system where artists make large portions of profit off of their own work. NFTs could be an alternate gateway to that. What will the response be?
Music streaming service Tidal has been known for giving more to artists throughout its existence – about 4x more per stream. This is amazing, until you realize that this means artists collect $0.0125 per stream instead of the $0.004. And on November 17 when they introduced their new subscription plans, what caught the most attention was those who purchase the $19.99 plan will see 10% of their subscription go directly to their top artist. Great, another part of the pro rata model that sees the top artists reaping the rewards significantly more than smaller artists. I love AG Club, Tkay Maidza, and Jean Dawson, but Tyler, The Creator has been my most listened to artist the last four years! Why is he more deserving of that $2 than those smaller artists, especially once you factor in that I am merely one of thousands whose top artist is Tyler.
Back in March, SoundCloud took massive strides to disband the pro rata model and turn to a user based model. Music Business Worldwide explained the conversion in this article, writing, “Under the ‘Fan-centered royalties’ model, royalties attributed to HiFi Plus subscribers will be paid based on their individual streaming activity as opposed to the industry-standard method of aggregating streams and paying out to artists from a pool at the end of a payment period.” Unlike the new Tidal model, this would essentially break up the 10% of my subscription fee across everyone I listen to, giving smaller artists an equal chance at the pie. This was an extremely important step in the right direction for the music industry, greatly impacting 100,000 independent artists.
The music industry is a larger reflection of capitalism – the smaller artists are the backbone, yet it is the major artists and people at the top of the corporations who reap the rewards. However, smaller artists drive the industry through innovation and creativity in ways that no other industry does
Yet SoundCloud still remains to be the exception, not the norm. Will this change due to the immense opportunities brought by NFTs? Will Spottie Wifi soon be the norm of music releases? Will streaming services and record labels finally start giving artists what they deserve with competition looming? I sure hope so, because if not, artists will continue to make significantly less money than they deserve or we will continue to ravage our planet.